When it comes to controlling healthcare costs, it seems like large companies like Amazon, American Express and GM are at a distinct advantage. They can use their size to negotiate deals and discounts with providers or even open their own employee health clinics.
But if your organization has hundreds of employees, rather than hundreds of thousands, there are still a wealth of options that allow you to control healthcare costs for your company and employees.
Smaller companies might not be able to individually negotiate the deals that Amazon can, but by working with consultant or broker partners, you can enjoy better results than you have now.
Where should you start? Here are three ways employers can leverage broker partners to control healthcare costs.
Shop Carrier and Vendor Solutions
Shopping around within your market is one of the best ways employers can reduce healthcare costs and ensure they are getting the best deal possible. Switching to a different carrier or vendor that’s offering a lower price plan or a more economic solution will save employers money in the long run.
Additionally, working with brokers can help companies leverage greater negotiating power with carriers and vendors. The presence of these brokers in the market allows companies to have access to a wider breadth of carriers, enabling negotiation of better deals and terms.
At minimum, a broker partner should be regularly performing market checks to ensure they are getting the best deal and terms possible. If they aren’t, you are likely overpaying.
Rethink Your Plan Design
Changing the health plan your organization offers can also go a long way toward reducing overall healthcare spending. By analyzing your employee census and looking at the demographic makeup of your workforce, you can structure a plan that meets the needs of your employee population and considers factors such as age, health needs and utilization patterns in order to maximize benefits and reduce costs.
Employers can offer a menu of plan design options to meet the needs of different segments within their workforce. For example, older employees tend to have different health needs than younger ones. A millennial worker, for example, might prefer a high-performance network plan with lower premiums. By providing the option to choose a lower cost plan, employers are saving themselves -- and their employees -- money while still ensuring their coverage needs are met.
Other factors can affect utilization rates. For example, if a company has a high population of employees that are using the ER frequently, they may want to consider increasing the ER copay to encourage employees to use lower costs options for care, such as urgent care facilities.
Consider High-Performance Networks
The most basic and easiest cost-saving option for employers is to include a high-performance network option. High-performance network plans include fewer options for care, but they can incentivize employees to seek higher quality and more efficient healthcare providers. These providers include centers of excellence or those that follow a value-based care model.
To find a high-performance network, work with a broker or consultant to determine utilization for your employee base. Your data should easily be able to identify key indicators, such as employee health status, the doctors they are seeing and which hospitals they visit. Using that data to identify a high-performance network option will give your employees the same benefits and services at a lower cost to them and to you.
But while employees in the past may have had concerns that high-performance networks provide lower quality care, many of these networks now include an anchor teaching hospital or center of excellence. Offering high-performance networks with tiered providers can also help address concerns employees have about providers. And through proper plan design, employers can incentivize employees to make choices based on quality and costs.
For most business owners, healthcare is tough to navigate. It can be confusing and overwhelming at times, especially given the market dynamics we are seeing unfold before our eyes. However, by partnering with a consultant or broker with deep expertise, you can feel confident in navigating this complex system.